« Back to Glossary Index
Market rate or the going rate is the rate of interest that is readily accepted by borrows and lenders based on the risk level of the transaction. In other words, the market rate is the standard interest accepted in an industry for a specific type of transaction. Since interest rates depend on market and economy conditions, risk, and desired rate of return, interest rate tend to fluctuate over time and among industries.
Many times the market rate is influenced by the Federal Reserve’s prime interest rate because this is the rate that banks and other institutions can borrow money at.
- Rate of Return